Growth and public finance in Bihar

This paper explores the causal links between the role of public finance and Bihar's growth and development in the last decade; and argues that these links are tenuous. Bihar's growth acceleration precedes the ‘policy reforms' in public finance based on the ‘good governance' agenda initiated since 2005-06. However, the constraints on sustaining efforts to close Bihar's development gap with the rest of India stems from the nature of the growth process in its regional, sectoral and social dimensions and the contradictory means and ends of the ‘policy reforms' in public finance. Together, this has not only prevented the economic growth to add to public coiffeurs of the state but also occluded the role of tax institutions.

Spatial spillovers from FDI agglomeration : evidence from the Yangtze River Delta in China

Foreign firms have clustered together in the Yangtze River Delta, and their impact on domestic firms is an important policy issue. This paper studies the spatial effect of FDI agglomeration on the regional productivity of domestic firms, using Chinese firm-level data. To identify local FDI spillovers, we estimate the causal impact of foreign firms on domestic firms in the same county and similar industries. We then estimate a spatial-autoregressive model to examine spatial spillovers from FDI clusters to other domestic firms in distant counties. Our results show that FDI agglomeration generates positive spillovers for domestic firms, which are stronger in nearby areas than in distant areas.